May 26, 2022

Taylor Daily Press

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Investing in Space: Another Space Company Goes Public with SPAC

Investors can now buy shares in the space company Terran Orbital. This company, with the help of SPAC (Special Purpose Acquisition Company), also known as the Blank Check Corporation, was floated on the New York Stock Exchange.

Terran Orbital debuted on the New York Stock Exchange today. The company specializes in the production of satellites. Terran Orbital was able to start her adventure in the stock market with the help of SPAC. This blank check company raises the capital and then merges with another company or buys it and then puts it on the stock exchange. As a SPAC investor, you don’t know ahead of time what to invest in.

Not the first IPO with SPAC

Terran Orbital is not the first aerospace company to launch to the public via SPAC. Virgin Galactic, Astra, Rocket Lab and Planet are some examples of companies that came before the satellite producer. One of the most popular space companies on that list, Virgin Galactic, launched its initial public offering in 2019. The IPO was made possible by a merger with Social Capital Hedosophia, the venture capital fund of Chamath Palihapitiya.

Mark Bell, CEO and co-founder of Terran Orbital, in an interview with the US news site CNBC I don’t quite agree with the comparison with airline IPOs. “Looking at the SPACs, we couldn’t help but see that many of them weren’t companies that had to venture into the stock market,” Bell said. “We, on the other hand, have real revenue, real projects, real order book, real customers.”

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The company has contracts to build dozens of satellites for clients, including NASA and the Pentagon, to expand its order book from $68 million last year to more than $200 million today.

Missed the stock market for the first time

Either way, Terran Orbital first missed out on the stock market. An hour before US stock markets closed, the stock was in the red at 21.6 percent.

Aerospace companies generally do not appeal to investors at the moment. Virgin Galactic’s share price is down about 30 percent since the start of the year. Last summer, that stake was still at a record price (more than $55) in the run-up to a spaceflight with tourists. After that flight, the stock fell sharply. Since then, the price has been in a downward spiral.

The stake in satellite builder Astra is about 40 percent less than at the beginning of 2021. Rocket Lab, a producer of satellites and missiles, owns 37 percent of Red, and Planet, a company specializing in processing and analyzing satellite images, has managed so far From limiting the loss to just over 10 percent.