S&P Notches Record High, Closing > 4000

Dow: +0.52 | Nasdaq: +1.76 | S&P: +1.18%

Catch Up Quick

• A Baltimore plant accidentally destroyed 15M COVID-19 vaccines from J&J

• Major companies are expressing concern about Georgia's voting rights law → critics say it will affect Black communities' voting access

• New York has legalized recreational marijuana for all adults > age of 21

• Shares in Deliveroo ($ROO) bottomed-out down 30%, in the U.K. food delivery company's debut on the London Stock Exchange

• Google ($GOOGL) is accelerating partial reopening of offices and putting limits on future of remote work

• President Biden asked the Education secretary to see if he can legally cancel up to $50K in student debt

• Zoom CEO Eric Yuan and hundreds of Asian American business leaders pledge $10M to AAPI causes

• T-Mobile plans to shut down an important network Dish customers still use

• Endeavor, the entertainment talent agency and live events operator led by Ari Emanuel, filed for an IPO

• Microsoft ($MSFT) won a U.S. Army contract for augmented reality headsets worth up to ~$22B over 10 years

• President Biden will not use a wealth tax to help pay for the incoming infrastructure package

• UnitedMasters, a distribution platform for musicians, raised a $50M Series B led by Apple (very rare investment type from the tech giant)

Thought of the Day

• This past Tuesday, $50B asset manager ARK Invest unveiled a space exploration ETF → ARKX

• In our view, the space industry is one of the most promising yet least understood industries in existence

• For example, last year, Bank of America issued conservative estimates for space to become a $1.4T market in the next decade, fueled by a double-digit CAGR

• CNBC’s Jim Cramer recently provided a different perspective

  One look at the newly launched ARK Space Exploration ETF tells you everything you need to know about how managers can’t resist creating new funds, even if there’s no reason for them to exist — Jim Cramer, Mad Money

• Cramer continued to critique the fund via confusion as to why names like Amazon ($AMZN), Alibaba ($BABA) and Netflix ($NFLX) were included

• In our views, the space industry, while bearing inevitable future growth, is already an invisible backbone to our economy

• For example, consider Netflix in the context of the aforementioned, and its ~200M paying subscribers

• In the U.S. alone, there’s > 40M people w/ out access to broadband

• If a satellite solution can bring access to those customers, reasonably assuming a a semi-linear relationship between paying subscribers and revenue, this would expand the topline for Netflix by over 20% → a colossal increase for a $230B market cap company

The Bottom Lines

• SpaceX finished 2020 with 25 orbital missions, up from 13 in 2019

• While this only reflects results from one company, it’s vanguard status allows it to be a reasonable industry benchmark from a technology perspective

• Relative to huge yet quiet industry gains, most space ETFs have not priced accordingly → $UFO has only gained ~1% in the past 2 years

• In short, between huge growth potential and underwhelming industry understanding ( → low valuations), now could be a good time to add space exposure to portfolios!

  Afternoon Audit