Investors are excitedabout space—and they are jumping ona dealthat will bring another fledgling space company to public markets.
Tuesday, space-launch company Astra announced it is merging with special purpose acquisition companyHolicity(ticker: HOL). When the merger is complete, the new company with trade under the stock symbol “ASTR.” Until then, space investors can buy Holicity stock. Indeed, they have started to already. Holicity shares were up more than 50% in Tuesday afternoon trading.
“This transaction takes us a step closer to our mission of improving life on Earth from space by fully funding our plan to provide daily access to low Earth orbit from anywhere on the planet,” said Astra founder and CEO Chris Kemp in the company’snews release.
The merger gives Astra a pro-forma market capitalization of almost $4.1 billion.
The number of space stocks and data points is growing like, well, the constellation of satellites circling the globe.Lockheed Martin(LMT), for starters, recently paid about$4.4 billionto acquireAerojet Rocketdyne(ARJD). Space-logistics providerMomentusis merging withStable Road Acquisition(SRAC), giving Momentus a market capitalization of about $3.4 billion based on 151 million shares outstanding when the merger closes.
Space-tourism pioneerVirgin Galactic(SPCE) has achieved a $12 billion market cap along with a strong following on Wall Street. Six Wall Street analysts rate the shares Buy, while three others rate the sharesHold. The average Buy-rating ratio for stocks in theDow Jones Industrial Averageis about 57%.
Virgin Orbit is another space-launch services company that recently reached orbit. It is still privately held, not yet finding a SPAC merger partner.
SpaceXis privately held, as well. Elon Musk’s space firm is the largest of the lot, valued at an estimated $46 billion. SpaceX pioneered the use of reusable rockets, helping to spark the space gold rush. Along with carrying astronautsfor NASAto the International Space Station, the company is launching itsStarlink satellitesto build a global, space-based Wi-Fi business.
Astra’s rockets don’t appear to be reusable; it is lowering launch costs in other ways. “We’ve invested in machines and infrastructure to produce rockets at scale,” says Kemp ina video tourof the company’s manufacturing facility. Reaching orbit used to take tens of millions of dollars. New companies are lowering the bill to millions of dollars.
Falling costs are opening outer space for business. For exactly what, however, is still a guess. “Were going to see new applications that no one has ever imagined that will help improve life on earth,” says Kemp. Among the possibilities that people are imagining are new communications technologies like the ones SpaceX is pursuing, detailed earth observation, early-warning systems for defense, and weather and GPS applications.
Astra appears confident that new applications are coming. The company has ambitions to have daily orbital launches by 2025. Revenue is projected to reach $1.5 billion that year, and Astra projects almost $700 million in free cash flow.
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