When it comes to space company IPOs, you owe the PSPCs

2020 was the year of the IPO of the ad hoc acquisition company (SPAC) – and 2021 will probably be even better.

According to SPACInsider.com, as many as 248 PSPCs filed for IPO last year, having been made public for the sole purpose of finding a very attractive private company to buy and IPO as part of the deal. ‘a reverse merger. Not even a full quarter in 2021, we’ve already seen almost as many IPOs from PSPC this year as we did last year.

Why are PSPC IPOs so popular?

First, they are faster to complete than a traditional IPO, which can take up to six months. Second, PSPC IPOs are not subject to the same gag rules that prohibit “normal” IPOs from projecting into the future. When announcing an acquisition, PSPCs routinely predict gigantic revenue growth, huge profits, and addressable markets that border on too good to be true. These illusory statements are helping to generate excitement among investors and propel PSPC valuations to the moon.

Image source: Getty Images.

And speaking of the moon …

Such promises become even more believable when applied to whole new markets such as space, where no one is really sure how big the opportunity is – and even the sky seems limitless. So it’s no surprise that some of the hottest PSPC IPOs we’ve seen lately have been from space companies. race to become public.

Here are the seven most popular SPAC space IPOs:

Galactic Virgo

Virgin Galactic Holdings (NYSE: SPCE) started the SPAC space trend when it went public in partnership with Chamath Palihapitiya’s original Social Capital Hedosophia SPAC in 2019. Virgin Galactic aims to popularize the concept of “space tourism” by transporting tourists to the edge of space, six at a time and for $ 250,000 each, in a suborbital space plane dubbed Virgin SpaceShip Unity. Virgin is the oldest and most valuable space service provider with a market capitalization of $ 8 billion.

Virgin has successfully completed two test flights to the edge of space in the past, but its test program suffered a few hiccups after moving to Spaceport America in New Mexico, and test flights are currently pending until May 2021. Nevertheless, S&P Global Market Intelligence data shows most Wall Street analysts expect Virgin stocks to outperform the market over time.

Holicity (Astra)

As Virgin Galactic’s shtick flies humans into space and brings them back, space SPAC Holicity (NASDAQ: HOL) wants to launch satellites into orbit and leave them there. To that end, it will bring small public rocket launcher Astra in a $ 2.6 billion reverse merger IPO (or $ 2.1 billion in enterprise value, plus $ 500 million in deployable cash). ). closure planned for the second quarter of 2021.

Astra first reached space in December 2020, sending a “Rocket 3.2” launcher over a 236 mile arc. However, the rocket nearly hit orbital speed and fell back out of orbit – but with 50 customers having booked future launches on its rockets, Astra is expected to try again soon.

Vector acquisition (Rocket Lab)

SPAC Space’s latest IPO on the market is Vector acquisition (NASDAQ: VACQ), who announced earlier this month that it will bring a small public rocket launcher Rocket Lab in Q2 2021. With an expected post-IPO market cap of $ 4.9 billion (4.1 billion enterprise value, $ 750 million in cash), Vector Acquisition’s Rocket Lab IPO would make it the second most large pure-play space company in the market.

And maybe he deserves to be. After all, Rocket Lab has already performed 16 successful rocket launches, putting 97 payloads into orbit – and keeping them there. Next to SpaceX, it is arguably the most successful private space launch company. And Rocket Lab has the ambition to become the only company with a reusable rocket next to from SpaceX, because it designs a new medium-lift “Neutron” rocket in addition to its workhorse, Electron.

Acquisition of stable routes (Momentus)

Acquisition of stable routes (NASDAQ: SRAC) is our next hot space IPO. In “early 2021It aims to acquire and go public with “space tug” company Momentus, which has partnered with SpaceX to help push small satellites, carried through space by Falcon 9 rockets, into their proper orbits The company has yet to launch its first tug, however, and in January its first launch was delayed pending Federal Aviation Administration (FAA) approval.

Stable Road is seeking a market cap of $ 1.5 billion for Momentus, comprising an enterprise value of $ 1.2 billion and approximately $ 310 million in cash.

NavSight Holdings (Global Spire)

By shifting our focus from spaceships to satellites, NavSight Fund (NYSE: NSH) announced this month that it will acquire and contribute the public earth observation satellite company Spire Global. Spire operates a proprietary constellation of 100 satellites, collecting, analyzing and selling the data it collects to governments and to customers in the weather, aviation and marine industries.

NavSight sees Spire hit the market with a valuation of $ 1.6 billion ($ 1.1 billion enterprise value, $ 475 million in cash) in the summer of 2021.

Acquisition of Osprey technology (BlackSky)

In the same way, Acquisition of Osprey technology (NYSE: SFTW) will bring the public satellite company BlackSky July 2021. BlackSky offers “real-time geospatial intelligence, imagery and data analysis” services through a constellation of five satellites, and claims to have a $ 1.7 billion “pipeline of opportunities” ahead of it. To capitalize on these opportunities, BlackSky will launch nine more satellites this year and ultimately build a constellation of “30 high-resolution multispectral satellites capable of monitoring locations on Earth every 30 minutes, day or night.”

Osprey is aiming for a valuation of $ 1.5 billion on BlackSky, comprising around $ 1 billion in enterprise value and $ 475 million in cash.

Acquisition of New Providence (AST SpaceMobile)

Finally, Acquisition of New Providence (NASDAQ: NPA)which I wrote in January – seeks to acquire and float AST SpaceMobile, “the first and only space-based broadband cellular network directly accessible by standard mobile phones”. SpaceMobile currently has no satellites to run this network on, but hopes to have 110 in orbit “by the end of 2023 or early 2024”.

In the meantime, New Providence will vote to approve its merger with AST SpaceMobile on April 1 and expects to complete the merger on June 15, 2021. Once made public, AST SpaceMobile is expected to have a market capitalization of around $ 1.9 billion. – $ 1.4 billion in enterprise value and up to $ 462 million in cash.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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