SpaceXs Telling Acquisition This Week – InvestorPlace

Did you hear about SpaceXs acquisition last week?

Most investors didnt.

Thats because the press largely yawned at the news. After all, whats the big deal?

Well, as our macro specialist, Eric Fry, points out below,whySpaceX made this acquisition is very telling.

The answer points toward a massive technological trend that will define this decade, and generate enormous wealth for investor portfolios that are well-positioned.

Today, lets hear more from Eric about SpaceXs acquisition, this megatrend, and a leading space technology and intelligence company thats poised for huge growth over the next two to three years.

Ill let Eric take it from here.

Have a good weekend,

Jeff Remsburg

Elon Musks Quiet Acquisition Has Everything to Do With 5G

By Eric Fry

When SpaceX does something, you know about it.

Whenever one of its rockets launches or lands, media outlets everywhere plaster it all over our screens.

Scroll YouTube for a while, and you can find thousands of Elon Musk fans cheering SpaceXs admittedly impressive launches and landings.

SpaceX crashes get blanket coverage as well and they bring out Musk haters full of schadenfreude.

Earlier this week, however, SpaceX did something very quietly.

When it acquired Swarm Technologies, a small satellite connectivity startup, it didnt issue a press release. Musk didnt tweet about it.

Instead, SpaceX pencil pushers filed some paperwork with the Federal Communications Commission (FCC) and enterprising reporters dug it up.

Of course, once we found out about it, the SpaceX-Swarm deal got the same amount of attention that everything Musk-related receives.

However, the deals surreptitiousness ended up receiving most of the attention. (As did the fact that this is SpaceXs first acquisition during its 19-year life.)

And that means you could have missed out on learningwhySpaceX bought Swarm and how that ties into the 5G megatrend.

Lets take a look

No IoT Without 5G

Swarm operates a constellation of 120 smartphone-sized satellites and a ground station network. In the deal, SpaceX gets all that plus various space licenses and patents.

Of course, the deal makes sense for Swarm. It gets this tiny 30-person company the resources it needs to take on similar smallsat companies.

While SpaceX prefers to develop technology internally, this deal puts it in one quick move into the Internet of Things (IoT) business.

Swarms SpaceBEE satellites communicate with its ground station network of antennas with a Swarm Tile. All those devices on the ground are then part of the global IoT network.

The IoT is a vibrant, high-speed network of physical objects things that are embedded with sensors, software, and other technologies for the purpose of exchanging data and communicating with other devices, systems, and/or people.

The global IoT market is expected to reach a value of $1.39 trillion by 2026, up from $761.4 billion in 2020, according to Mordor Intelligence.

At this point, youre likely asking what all this has to do with 5G.

Heres the thing: The IoT cannot reach its true potential without the next generation of mobile broadband that will replace or augment existing 4G LTE connections.

5G technology drastically improves upload and download speeds, while also improving latency, which is the time it takes devices to communicate with wireless networks.

The current 4G network delivers around 100 megabits per second. But once 5G rolls out, that number jumps to 10,000 megabits per second or 100 times faster than the current speed.

That means an entirely new generation of technologies may become feasible and flourish.

Whereas 4G provided the network speeds necessary to run online apps and mobile streaming, 5G represents a monumental leap forward. It provides the foundation for a whole host of gee-whiz technologies including the IoT and dozens of other innovations now waiting at the starting gate.

Qualcomm estimates that 5G networks will generate a whopping $13.2 trillion in global sales activity by 2035. Other estimates say 5G is about to unleash an economic tsunami worth at least $56 trillion.

You cant invest in SpaceX or in Swarm.

But you can do this

A Competitive Constellation

Currently, around 100 satellites are launched every year.

But by the end of the decade, Euroconsult estimates, well be launching nearly1,000 satellites every year.

By 2028, there could be 15,000 satellites in orbit.

According to Euroconsult, by 2028, there could be 15,000 satellites in orbit.

Morgan Stanley predicts that the global space industry could generate over $1 trillion by 2040, up from $350 billion today.

Moreover, these non-terrestrial networks will become a vital link in the global 5G network deployment.

Thats a high-growth sector we want to be in.

And I like one particular play right now

Warren Buffett advises buying companies that possess a competitive moat an advantage that secures their market share and growth potential.

A space company that I recommended to members of my trading service,The Speculator, possesses what I call a competitive constellation.

That company is a leading space technology and intelligence company that traces its roots to the early days of space exploration.

Today, dozens of its satellites are orbiting Earth, and this constellation is gathering reams of data and delivering it in various forms to its government and corporate customers. As a result, nearly 4 billion people interact with this companys technology every month.

Clearly, it has constructed an impressive competitive constellation.

But the company does face competitive threats from the likes of other established satellite companies as well as upstarts like SpaceX and Virgin Galactic.

In addition to these corporate threats, it must also grapple with the ongoing technological challenges of space travel and exploration. As astronaut Scott Kelly famously quipped after a SpaceX rocket explosion in 2015, Space is hard.

Space exploration failures can lead to charges in the tens of millions against earnings.

In fact, despite delivering a strong quarterly report earlier this month that topped analyst estimates for both revenues and earnings, the companys shares dipped due to a worse-than-expected announcement about its next-generation fleet of satellites.

Despite this setback, however, the companys brass maintained its revenue and earnings guidance for the rest of the year.

Bottom line: That selloff seemed like a major overreaction to the satellite delay.

And following that report, I reiterated my belief in the company to Speculator members, stating that this company has compiled a long-term track record of success, despite intermittent setbacks, and I believe it will do so again and reap sizable earnings growth as a result.

The company, I said, remains a leading space technology and intelligence company that possesses substantial earnings growth potential over the next two to three years.

And I said that I believed the selloff is affording investors a second opportunity to invest in outstanding speculation.

To learn how to get this outstanding speculation as aSpeculatormember,click here.

Regards,

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SpaceXs Telling Acquisition This Week - InvestorPlace