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TLDR: 10x space company play; currently massively undervalued (extremely high chance of achieving 10x goal in 1 decade, moderately high chance of achieving within 5 years or less depending on broad sector performance).
To give you some background about me – I’ve been invested in the space industry for a few years now. As many of you probably know from $RKLB and $SPCE, there has been a massive space run up to the SpaceX IPO. My most dominant position had been $LUNR, while also playing $PL, $BKSY, and $RDW when the time was appropriate. Now my most dominant position has shifted to $FLY.
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What is Firefly Aerospace? What can they do?
Firefly Aerospace is a commercial space company.
**Elytra and Ocula**: These are Firefly’s “Multi-Mission Orbital Vehicles” (as they like to call them). Elytra handles “payload delivery, imaging, long-haul communications, and domain awareness across cislunar space.” Seems like Eltrya can also help position, service, and de-orbit satellites. Ocula is essentially a modification to Elytra specializing in advanced lunar imaging services.
**Blue Ghost**: Firefly’s lunar lander, and the first commercial lunar lander to successfully touch down on the moon.
**Alpha**: Firefly’s small-lift rocket. Its mission history is a bit of a mixed bag – some failures, but some great successes. Most notably, it successfully received a mission order and completed it within 24 hours; it’s carved a bit of a niche out for itself thanks to that. Most Alpha missions are national security / defense focused. It likely doesn’t pick up a lot of commercial contracts because it isn’t as cost effective as F9 or electron, and doesn’t have the track record.
**Eclipse**: Firefly’s medium-lift rocket, currently in development. 16,000 kg of capacity. Reusable. Built in partnership with Northrop Grumman (key point here). Launch timeline TBD.
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Firefly Advantages / Catalysts & Longterm Trends:
**National Security.**
Firefly has DEEP national security / military industrial connections. Joint development on a rocket with Northrop Grumman is already massive. There is no future where Firefly’s med-lift rocket gets no missions / contracts. Legacy military connections will favor this rocket over alternatives. [Lockheed Martin has already picked Firefly’s Aerospace’s Alpha rocket](https://news.lockheedmartin.com/2024-06-05-Lockheed-Martin-Purchases-Up-to-25-Rocket-Launches-from-Firefly-Aerospace) in order to launch a bunch of their spacecraft, despite Alpha not at all being the most competitive option. The CEO of Firefly also used to work for both Northrop and Raytheon.
The US has already begun to pump billions upon billions into space, be it for “Golden Dome” or other initiatives. Recently, Firefly acquired SciTec, which has multiple Golden Dome oriented contracts already, including [FORGE](https://www.ssc.spaceforce.mil/Newsroom/Article-Display/Article/4175204/ussf-strengthens-missile-warning-mission-with-forge-enterprise-opir-solution-ef) and an [AFRL](https://investors.fireflyspace.com/news-releases/news-release-details/firefly-aerospace-subsidiary-scitec-awarded-afrl-contract) contract. As the commercial space company positioning itself for a national security focus, there’s a huge opportunity here.
**Lunar Dominance.**
When it comes to Lunar Landers, Firefly and Intuitive Machines are the two dominant companies right now, with Blue Origin maybe being a competitor, though BO's lander is unproven. If you look at NASA’s C.L.P.S. contracts, it’s [majority Firefly, IM, and BO](https://www.planetary.org/space-missions/clps?utm_source=chatgpt.com).
I think noting the positioning between IM and Firefly here is important.
There’s a reason why when people think of lunar commercialization and dominance, they normally think about Intuitive Machines. IM has gone heavy into the MOON play. However, as seen by the most recent LTV contract wins (out of 3 companies, IM was the only company that got nothing), gov agencies are seemingly prioritizing diversification of contract awards. That's good for competitors, bad for IM, because it inhibits IM's growth story. While IM’s backlog is remaining relatively steady, they NEED to win and dominate massive contracts in order to maintain space industry mega growth levels.
But Firefly is going to have launch, it’s going to have the national security plays, it’s going to have the lunar lander plays, and it’s valued close to IM despite doing half of the revenue. It’s going to have more contract / revenue diversity, and it’s going to be able to dominate multiple different sectors. It already has a larger backlog – estimated around 1.4 billion. Even carving out 10% of the med lift market will be significant, and it’ll be able to play as a full end-to-end lunar company, while joining RKLB in the big leagues (mind you, RKLB is like 10x the market cap atm). While IM got a seemingly good deal bringing in way more revenue with Lanteris, a lot of that revenue is being wasted away just building the satellites themselves, and paying off debt, pension payments, etc. Also of note, Firefly's most recent lunar delivery contract actually [uses Elytra](https://investors.fireflyspace.com/news-releases/news-release-details/firefly-aerospace-wins-75-million-nasa-jpl-moonfall-subcontract), not Blue Ghost.
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Disadvantages & counterpoints.
I’ve already gone over a bit, so I’ll keep it relatively simple.
* They’re burning tons of cash on R&D, mostly to build Eclipse. This was my biggest concern, but it’s also the same concern that kept me out of buying RKLB at first, which was NOT the right decision. Plus, Firefly has reached the market cap where they can raise tons of capital for relatively cheap.
* I do think med lift is going to be a bit saturated, but I also think a lot of countries are going to opt to move away from SpaceX due to how toxic Elon Musk is. And as I said, I think Firefly offers some good connections to maintain interest in its launch services.
* Lack of recurring revenue, because it doesn’t have a constellation or anything. Not super concerned here, though, because it has time to figure something out.
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Positions:
2600 $FLY Shares, 12 calls exp November, with interest in adding more but waiting to see how the market moves.