Business

CEO who wants his company to become the Toyota of rocket launchers says losing two-thirds of its value won’t change strategy

It’s never easy for an executive to witness two-thirds of their company’s value being lost in just five months.

But Chris Kemp, Founder, Chairman and CEO of Astra Space ASTR,
-3.69%,
based in Alameda, California, has a remarkably level-headed look at what has been a difficult year for profitless tech companies, and the space sector in particular. Virgin Orbit VORB,
-5.07%
and Rocket Labs RKLB,
-4.59%
have experienced similar share price falls.

“We raised a lot of capital at a time when capital was cheap,” he said on the sidelines of the World Economic Forum in Davos, Switzerland, where he helped launch a new research report with consulting firm McKinsey on how space can help sustainability and security . “If we have to go back to the markets and raise capital, it’s five times more expensive than it was six months ago, five months ago. So maybe you think very carefully about every dollar we spend.”

Kemp says he has no problem adopting a frugal mindset. With a list price of $3.95 million per rocket launch, it positions the company as a low-budget alternative to companies like SpaceX. “We don’t want to sell Mercedes, we want to sell Toyotas,” he said.

“It doesn’t require a change in strategy. It doesn’t require a change of focus,” said Kemp, a serial entrepreneur at internet companies before turning to his passion for space, first at NASA and then at Astra. With no debt on the balance sheet, there’s no pressing need for more cash, he said. “I think ‘just think long term’ is my message. Don’t watch the stock price, volatility and what’s happening in the markets today.”

But the fall in the share price is affecting recruitment. “To pull someone out of the big Fortune 500 company today, if the market does what it does, well, you took a higher risk to get into the company in the current market climate,” he said.

Astra went public in July 2021 after merging with SPAC, founded by Craig McCaw, who founded his own satellite company in the 1990s, which has since closed. With just two launches in the first quarter, the Astra is now on par with the Lockheed LMT,
+2.25%
– Boeing BA,
-3.76%
Venture for the fourth most popular orbital launch provider behind SpaceX, Russia and China. It will launch three rockets for NASA that will contain shoebox-sized hurricane-monitoring satellites.

According to Kemp, Astra’s rockets and launchers are compact enough to pack on an airplane, truck, train or container ship and travel anywhere in the world. He joked the company could launch a rocket from a Walmart parking lot.

Kemp’s goal is daily rocket launches. Astra is already in the space engine business through an acquisition that is part of a broader plan to offer related space technologies. It then wants to offer the area equivalent of today’s terrestrial cloud data centers.

Kemp says that all companies of the future will be space companies, just as they are all internet companies now. When challenged on this point, he was able to find use cases for random companies, with the exception of a ball bearing manufacturer. And that’s only because Astra makes its own ball bearings.

“If you don’t have high-precision ball bearings that don’t waste energy, they cause things to slow down or cause vibration [distort] pictures,” he said. Its ball bearings have to withstand temperatures from minus 200 degrees Celsius to plus 400 degrees Celsius.

https://www.marketwatch.com/story/ceo-who-wants-his-company-to-be-the-toyota-of-rocket-launchers-says-losing-two-thirds-of-its-value-wont-change-strategy-11653465045?rss=1&siteid=rss CEO who wants his company to become the Toyota of rocket launchers says losing two-thirds of its value won’t change strategy

Brian Lowry

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