From the Wall Street Journal, August 14:
Tiny Satellites: The Latest Innovation Hedge Funds Are Using to Get a Leg Up
The latest technological innovation for data-hungry hedge funds is a fleet of five dozen shoebox-sized satellites
The latest technological innovation for data-hungry hedge funds is a fleet of five dozen shoebox-sized satellites.
A company called Planet Labs Inc. has launched a small constellation of what it calls “cubesats” that can deliver much more frequent imagery of economically sensitive spots than traditional satellites. Those spots include retailers’ parking lots, oil-storage tanks or farmland.
The company, founded by three former NASA scientists, has now signed an agreement to supply data to Orbital Insight Inc., which mines satellite imagery for trading tips for hedge funds.
Until now, Orbital has relied on monthly or bimonthly imagery for its analysis. The deal with Planet Labs will give them access to weekly images at first. Next year, if Planet Labs succeeds in a plan to launch another 40 or so cubesats, Orbital will have access to daily images of every piece of land on earth.
“Almost all economic activity is change,” said Jimi Crawford, a former Google executive who founded Orbital. “Once you get down to daily images, tremendous new horizons open up to being able to monitor and track that change.”
Orbital counts several large hedge funds and other investment firms as clients. It declines to name them.
Orbital has offered clients “signals”—predictions on how prices will move for certain stocks—based on its automated analysis of satellite imagery since 2014. This analysis includes revenue predictions for big-box retailers such as Wal-Mart Stores Inc. and Target Corp. based on changes in the number of cars in their U.S. parking lots, or forecasts for oil inventories based on the height of floating lids in oil tanks in the U.S. In both cases, the company makes its predictions on a statistically significant sample of images....MORE