In recent days, it has been reported that SpaceX, Elon Musk's space company, has acquired a company called Pioneer Aerospace for a liquidation price of only $2 million – literally pocket money for a company that, if it goes public soon, will be the largest IPO in history, with an estimated value of about $150 billion (as of July). We used ChatGPT to explain the seemingly tiny purchase.
The deal, which was approved by a federal bankruptcy court in Florida two weeks ago, gives SpaceX the assets, intellectual property and employees of Pioneer Aerospace, a company that specialized in parachute components for spacecraft such as SpaceX's Dragon capsule, for $2.2 million. The Connecticut-based company, which had operated for decades, was sold after its parent company, Aviation Safety Resources, went bankrupt.
In the space race, one of the components that poses a significant challenge for all competitors is the parachute, which makes it possible to safely land people and cargo returning from space to the surface of the Earth. Both SpaceX and Boeing, which have contracts to transport astronauts for NASA, have not yet been able to develop their own parachutes for their spacecraft, so they have used those of Pioneer.
The two companies did not comment on the acquisition, but according to market assessments, it is a strategic move that serves SpaceX twice: first, it allows it to continue to benefit from the veteran company's parachute technology, and even improve it by acquiring the most experienced personnel in the field; And second, it will provide it with a new revenue stream as a company that sells parachutes to competitors – and for those who find it strange that SpaceX will sell technology that will allow it to compete with it, let's say that just last week it closed a contract with Amazon to launch dozens of Kuiper satellites into space, for the satellite internet service that will compete with Musk's Starlink.
Interestingly, unlike other tech companies, including its sister Tesla, SpaceX does not usually acquire companies. In fact, this is only the second acquisition in the history of the company, which has been operating for 11.5 years. Its most recent acquisition was Swarm Technologies, a startup working on a constellation of tiny satellites for internet services, which it "swallowed" in 2021.
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