Actually Bilbo doesn't believe in UFO's so no conspiracy theory.

My guess would be that it was just some tech geeks fooling about with a very powerful projector.

I used to own a cheapish (£500) projector and can remember for fun shining scenes of Pearl Harbor or some other war films onto the houses in the street behind us.

You'd see massive planes flying across the houses, it was really quite impressive.

That just looks to me like a more expensive projector setup shining a spiral into the sky.