Rocket Company Launches Stock Offering
The Ad Astra Rocket Company, founded in 2005 by Costa Rican astronaut and physicist Franklin Chang, announced Wednesday that it will become a limited public corporation, offering stock to investors willing to pay a minimum of $25,000 on Costa Rica’s National Stock Exchange.
Ad Astra Rocket Company, headquartered in Houston, Texas, also has a branch in Liberia, capital of Costa Rica’s northwestern Guanacaste province.
“We expect investors of Ad Astra Rocket to be more sophisticated, knowledgeable investors who understand the stock market and the undertaking of larger investments,” said Oscar Luis Chaves, director of the economic consulting firm Aldesa, which is helping orchestrate Ad Astra’s limited public offering. “It’s not your normal investment. There aren’t a lot of investors who have committed funds to a rocket company before.”
According to José Rafael Brenes, general manager of the National Stock Exchange, the possibility of investing in Ad Astra Rocket Company should be available within the next three weeks, with a tentative Oct. 12 release date set for the stock. In addition to Costa Ricans, investors from Panama and El Salvador will also have the opportunity to buy shares in the company. According to Chaves, Ad Astra seeks a boost of $85 million in private investments over the next four years. Currently, about 70 percent of the investment that fuels the Ad Astra Rocket Company comes from Costa Rican contributions (TT, Aug. 13).
Ad Astra Rocket Company’s primary project is the plasma-powered variable specific impulse magnetoplasma rocket (VASIMR). The VASIMR is unique in that instead of relying on voluminous amounts of traditional fuel to launch it into space, the rocket will be powered by plasma, formed by heating argon gas at a temperature similar to that of the sun. According to Chang, for the missions for which it is designed, the operating cost of the VASIMR is 20 times less than that of a conventional rocket engine.
The first mission of the VASIMR, which was designed by Chang at the Massachusetts Institute of Technology, will be to clean up the ever-growing problem of space trash. Satellites often lose power or stop functioning years after their launch. The satellites continue to orbit the Earth, cluttering space and increasing the possibilities of collisions. Chang’s project aims to diminish the number of inactive satellites, either by refueling them at the International Space Station or bumping them toward the Earth’s atmosphere or the sun, where they will burn up.
“The enthusiasm of Costa Rica behind this project gives me a lot of confidence that investors will continue to want to be a part of supporting this mission,” Chang said Wednesday. “I am so proud to receive such support from my home country in financing the VASIMR and our mission to help solve the increasing problem of space junk.”
Ad Astra is currently working with NASA on a test date for the VASIMR in 2013. If all goes as planned, the rocket will enter into commercial use in 2014. The United Nations is considering regulations and possible fines for countries or companies that launch satellites with no plans for their disposal. Chang feels that his rocket’s proposed cleanup services will arrive at a time when the need to reduce space junk will be peaking.
“This market is just beginning to surface, and several companies have expressed interest in our services,” Chang said. “Everything is driven by economics. These types of things are not cheap. The cost of launching a satel- lite, for example, is about $150 million to perhaps $200 million. Some fraction of that would be what you need to be willing to pay to dispose of it. These numbers will have to be carefully considered when coming up with a rate.”
Chang’s VASIMR also intends to embark upon deep space missions, including travel to Mars. Chang believes his plasma rocket can cut the travel time to Mars from eight months to approximately 40 days.
Betting on VASIMR
According to Chaves, like any other investment, putting money into Ad Astra carries risk. A plasma rocket such as the VASIMR has never traveled in space and a project has never before set out to reduce the number of dead satellites orbiting Earth.
“Often we have to ask ourselves ‘what happens if something fails?’ or ‘what happens if NASA rejects the idea of a launch?’” Chang said. “But the team that is building the rocket includes veterans of NASA with years of experience. While we consider the possibility of failure, we are confident that the project will function as planned.”
According to Robert Singer, Ad Astra’s general counsel, the company is also considering the possibility of becoming a publicly traded company in the U.S.
“It’s definitely on our radar,” Singer told The Tico Times. “When that might happen we aren’t yet sure, but there is a definite possibility that Ad Astra could be a public company (in the U.S.) in the future.”
Possible investors in the country could include pension funds, banks, stock markets and private companies. Owners of assets valued at over $1 million can also invest. According to Brenes, those who buy company shares will not be able to resell them within 18 months.
Since 2005, when Ad Astra opened with an initial $6 million investment, the company has raised an additional $14 million from private sources. With only $20 million raised during the project’s first five years, raising an additional $80 million in four years is a steep challenge.
“I know that the people of Costa Rica support this mission. It is obvious in their contributions thus far,” Chang said. “But by allowing for investors to acquire shares in the company, we think that could be the source to propel the project along even further.”
Maybe even all the way to Mars.
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