Space is the final frontier, and while it’s implicit that there’s plenty of, well, space there, there’s a rush to put more satellites into orbit to power broadband internet.
That rush, which some experts call a land grab, has implications for exchange traded funds like the ARK Space Exploration and Innovation ETF (ARKX).
“A flurry of space companies filed requests with the Federal Communications Commission on Thursday for new or expanded broadband networks, asking the regulator for approval of nearly 38,000 total satellites,” reports Michael Sheetz for CNBC. “Amazon, Astra, Boeing, Inmarsat, Intelsat, Hughes Network, OneWeb, SpinLaunch, and Telesat are among those asking the FCC for access to what is known as V-band spectrum, a range of frequency that the companies hope to use to provide global broadband service from space.”
The satellite internet part of the space investing proposition is often overlooked because it lacks the sex appeal of space travel. However, space tourism is a minute part of the space investing equation — something ARK Invest is aware of, and the actively managed ARKX is positioned accordingly.
In fact, ARKX features exposure to what are known as orbital aerospace companies, which “launch, make, service, or operate platforms in orbital space, including satellites and launch vehicles,” according to ARK Invest.
Of the aforementioned companies pursuing FCC licenses, Amazon (NASDAQ:AMZN) and Dow component Boeing (NYSE:BA) are members of the ARKX lineup. Several other ARKX components are already involved with satellite broadband and/or are likely to pursue FCC licenses, too. Combined, Amazon and Boeing want to put more than 13,000 broadband satellites into orbit.
“One major issue from the potential jump in the number of satellites in low Earth orbit is the risk of collisions and creating new space debris. Companies’ proposals include maneuvering systems and using the atmosphere to burn up any defunct satellites, as a way to combat that risk. The proposals also include a wide range of altitudes, ranging anywhere from as little as 600 kilometers above the Earth to 10,000 kilometers or more,” according to CNBC.
In other words, it takes some deep pockets to operate in the orbital aerospace realm — which Amazon and Boeing have.
Another issue to consider is that some experts view the satellite broadband supply chain as being in need of shoring up. As those enhancements arrive over time, ARKX could benefit because some of its holdings have exposure to the supplying of components, parts, and technology.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.