Did the Space SPAC companies go public too soon?
For many companies that are currently in their R&D phase, why do they go public while they're building out their products, awaiting approval from regulators, etc.?

Is it because private investors aren't interested in remaining patient for a bit longer? Or is it because the founders wanted to capitalize on the high valuation that publicly traded startups are reaping?

During the SPAC boom, many space companies from $SPCE $MNTS $ASTR $SATL etc. all went public while being in their pre-revenue phase. All of them are currently generating losses.

The nature of these infant industries is that they need to take their time to develop a working product before they can start generating profits. And most Wall St. investors aren't fond of waiting for profits to come in. They base their decisions on each quarterly earnings release. If milestones are taking longer to reach, these investors lack patience and they'll sell tons of stock at once and depress the company's valuation. Having a lower valuation makes it more expensive to raise capital. And even if that's the cheapest way of raising capital, diluting existing shareholders will create more problems.

With the SPAC bubble, many startups took advantage of the opportunity being presented to them. Because of this, the founders got a huge windfall, the company is under more scrutiny, and the objectives of these companies have changed. The recent stock market sell-off is one reason why many innovative companies like SpaceX and Stripe choose to stay private. They would prefer to see their valuation endure less volatility and work with investors who have more patience for the products and services that the company is developing.

In the meantime, I'll remain skeptical about the many space companies that have gone public. I wish them the best and hope that they can find ways to raise more capital to facilitate their cash burn. If the stock market continues to decline and interest rates continue to surge, the tight credit markets could be a make-or-break moment for these space companies. Since these companies have a high risk of dilution, I see the huge stock market sell-off not providing much of a margin of safety for investors looking to buy the dip on those space companies.
You’re missing $RKLB off your list. Its share price has suffered a similar fate to other space companies but I’ve still got faith because they actually launch rockets into space regularly and more importantly successfully
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Long Astra Space $ASTR as they look to provide launching services for competing satellite internet companies
$ASTR is a pre-revenue launch company that is dedicated to providing personalized launch services for satellite internet providers looking to launch low-orbit satellites.

Currently, SpaceX would be providing launch services for other firms. However, many of their clients would have to be flexible with SpaceX's launch plans as SpaceX will prioritize its objectives. Because of this, SpaceX doesn't help its clients launch satellites in specific locations of the Earth's atmosphere.

Astra Space is solving that issue by providing personalized launch services to those firms. One of those clients could be $AAPL as they were looking to enter the satellite business. Other potential clients include the US Department of Defense, $SIRI (if ever they want to have low orbit satellites to enhance their service), and other satellite startups.
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The nice thing about self publishing and not relying on it for income is I can experiment. There's a lot of "move fast and break things" in aerospace and that is a formula for plenty of ESG issues. Here's a new format I'm trying.

I discuss small cap rocket company $ASTR and why they're in big trouble. Plus I muse on Jeff Bezos' Blue Origin


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"The nice thing about self publishing and not relying on it for income is I can experiment" - Finding this too now my paywall is gone :)
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Are SPACs Back? My thoughts on a SPAC Picker’s Market.
Since SPAC sentiment hit it’s peak in February with the announcement of the CCIV and $LCID merger, it has been quite popular for mainstream financial media and financial Twitter alike to bash SPACs, and for good reason. Companies like $NKLA, $RIDE and $MNTS have left a sour taste in the mouth of investors for promising massive growth opportunities and downright lying in same cases. However, just like it has been a stock pickers market for all of 2021, I believe that there are absolutely some diamonds in the rough within the SPAC ecosystem.

Four companies I like moving forward include: $MP (Complete de-SPAC) $LCID (Recently went through PIPE sell off), $ASTR and $RKLB. These companies represent the various stages of a SPAC life cycle and offer very different investing/trading opportunities.

$MP is a rare earth materials mining company located in Las Vegas, Nevada that owns and operates the Mountain Pass Mine, the only currently operation rare earth minerals mine in the Western Hemisphere. MP Materials looks to grow the rare earth materials supply chain and return it to the United States after China has taken over 90% of the worlds supply chain. With the adoption of batteries for electric vehicles, increased use of wind turbines and other applications, look for this $6 billion dollar market cap company continue to make moves to the upside. Current analyst price target average: $45 (32% upside)

$LCID Lucid Motors is most certainly a household name for all investors by this point, engulfing retail traders in excitement and anticipation for the announced merger with CCIV in February, after which coincided with the significant drop we saw at the end of February and into March. Consistently labeled as the $TSLA killer, Lucid has yet to deliver a single car. Rightly so, there are a lot of questions about its high valuation just over $37 billion. While $37 billion is a high valuation for a company with 0 deliveries (this will change in October with the first vehicles slated for delivery), $LCID, like $TSLA, is a technology company. Batteries in development currently have over a 500 mile range and there are talks about licensing and manufacturing these batteries for other legacy automakers looking to get involved in the EV trend. With deliveries incoming, there are many positive catalysts on the calendar over the next few months. Current analyst price target average: $28 (22% upside)

$ASTR is a company I made a post on recently, with its recent earnings report along with its first commercial launch conducted for the DOD and Space Force. While the launch was not a complete success, getting to space is extremely difficult. I believe that the space sector of the market will only continue to grow its important and prevalence in our society. With possible contracts in the pipeline and a successful commercial launch on the horizon this stock has the ability to move. Current analyst price target average: $13 (36% upside - only one analyst initiated coverage)

Lastly, my current personal favorite - $RKLB. The only publicly traded direct competitor to SpaceX, Rocketlab has been named the “highest quality space asset to enter the public market so far.” With a proven track record of successful launches under its belt, $RKLB will look to continue building out its “Satellite-as-a-Service” business model along with its contracts with NASA and other government agencies. Perhaps most exciting is the mission planned to the moon for NASA’s Artemis mission later in 2021. With a rocket in development, the Neutron, a direct competitor to the Falcon 9, a mission to Venus and a mission to Mars, this company is a leader in the space sector. However, the lock up expiration period will end on the 22nd of September, so there may be movement to the downside over the short term. Yet, with missions planned for September 30th and throughout October, I will continue to DCA. Current analyst price target: $24 (37% upside)

Honorable SPAC Mentions:
Taylor's avatar
$97.1m follower assets
The Space Race Heats Up
While Elon Musk’s SpaceX, Jeff Bezo’s Blue Origin and Richard Branson’s $SPCE have dominated the headlines in regards to space flight and payload transportation, investors should take note of small rocket launch company $ASTR making noise.

After hours today, it was announced that Astra was awarded the US Space Force’s Orbital Services Program - 4 contract. This contract allows for the US Space Force to contract with Astra to launch a payload over 400 lbs into orbit between 12-24 months out. While $ASTR is not the sole beneficiary of this contract, it highlights the governments confidence in the company to be able to supply reasonably priced and safe orbital transport of vital government equipment. The news of this announcement propelled the stock up over 14% currently after hours.

Additionally, earlier in August, the United States Space Force announced that it had selected $ASTR to service a multiple launch contract for orbital transport and had scheduled the first commercial test launch for the company to take place of August 27th. A second launch has already been scheduled for later this year.

The stock has been on a tear over the last week, up more than 31% over the last 5 days.

$ASTR was previously listed under the ticket $HOL and has recently undergone the de-SPAC process, where it dropped to low of $8.12 following a high of over $22.

With its first earnings call scheduled on August 12th after hours, this will be one that I will closely be watching. Either way, I am long on the entire space sector, especially companies providing cheap, reliable and frequent trips to orbit for both government and commercial costumers.

If interested in learning more, I highly recommend taking a look at their investor presentation linked below.


Long Space and Long $ASTR

Note

Also on my radar is the de-SPACing for $VACQ and Rocket Lab, another rocket launch company, focused on orbital transport, but also tied in with NASA on missions to Moon, Mars and Venus. I will be looking for an entry point following the closing of the merger expected later this month.
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