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New Space Stock Eyes Bigger Rocket, Human Spaceflight After SPAC Deal

Business

More space stocks will test investors’ appetite as Rocket Lab unveiled plans to launch onto the Nasdaq through a “blank check merger,” while a satellite company announced similar plans to go public.

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Special purpose acquisition company (SPAC) Vector Acquisition (VACQ) will take Rocket Lab public in a deal that values the space company at $4.1 billion.

Rocket Lab will trade under the ticker RKLB. The deal is expected to close in the second quarter, and leave the company with about $750 million in cash.

“This milestone accelerates Rocket Lab‘s ability to unlock the full potential of space through our launch and spacecraft platforms and catalyzes our ambition to create a new multibillion-dollar business vertical in space applications,” Rocket Lab CEO and founder Peter Beck said in the news release.

The merger will help Rocket Lab fund bigger ambitions: a new rocket called Neutron that will be larger than its current Electron rocket, which has already launched 97 satellites on 18 missions.

The Neutron can be used for human spaceflight as well as building large satellite constellations. The company plans to launch the rocket from NASA’s Wallops facility in Virginia.

Introducing Neutron — our new 8-ton class reusable rocket tailored for mega constellations, deep space missions and human spaceflight. Learn more: https://t.co/dews8XwdAM pic.twitter.com/R9NqltSHTF

— Rocket Lab (@RocketLab) March 1, 2021

That could position Rocket Lab as more of a competitor with SpaceX, which also launches humans into space and is building a massive Starlink satellites constellation with plans to go into deep space as well.

Meanwhile, SpaceX has entered the market for launching small satellites with a recent ride-share mission that put scores of satellites into orbit on one Falcon 9 rocket.


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SPACs Take Space Stocks To Wall Street

SPACs offer a way for private companies to go public without an IPO. Instead of selling stock, the private enterprise merges with a shell company that’s already public. SPACs have become popular after years of being shunned by the financial community.

Spire Global, a small satellite provider, also announced plans to go public Monday through a merger with SPAC NavSight (NSH). Spire will trade on the NYSE under ticker SPIR after the deal closes this summer.

The company’s Lemur satellites are used in weather forecasting as well as ship and aircraft tracking. Spire expects to raise $475 million from the SPAC deal, which values the company at about $1.6 billion.

Rocket Lab and Spire will join a growing list of other space stocks that have come public or are about to come public through blank check companies.

Virgin Galactic (SPCE) went public in 2019 after a reverse merger with Social Capital Hedosophia Holdings, while Astra Space is going public via Holicit (HOL) and Momentus is going public via Stable Road Acquisition (SRAC).

Virgin Galactic Stock Vs. Rocket Lab

Laura Forczyk, the founder of space consulting firm Astralytical, said some investors may view an operational company such as Rocket Lab as less risky than Virgin Galactic, which has yet to begin commercial flights.

But others may see Virgin Galactic’s hundreds of ticketholders as representing greater growth potential, she added.

“Rocket Lab’s Neutron rocket also opens up additional growth opportunities with additional customers but it’s not a direct comparison,” Forczyk told IBD. “Human spaceflight captures imaginations in a way uncrewed spaceflight does not.”

Vector Acquisition shares jumped 33.7% to 13.70 on the stock market today. Among other space stocks, NavSight gained 7%, Holicit added 15%, Stable Road picked up 16%, and Virgin Galactic rallied 2.5%.

Follow Gillian Rich on Twitter for space news and more.

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